Weekly Digest – 22 May 2020
Welcome back to our Weekly Digest. We hope you and your family are doing well.
Last week we mentioned the government’s state-by-state roadmaps to relaxing restrictions. Most states have started their roadmap and as a result some businesses are gearing up to reopen. If it’s still a little while away for your business – hang in there, have your return to work plan ready and please don’t hesitate to reach out if you want to chat about cashflow.
Our focus highlights this week are the Superannuation Guarantee Amnesty, EOFY Tax Planning, WFH expense claim shortcut, and some further focus on Business Models as our world returns to some normality.
Superannuation Guarantee Amnesty
In March the government introduced a Superannuation Guarantee Amnesty. The amnesty allows employers to disclose and pay previously unpaid Super Guarantee Charge, including nominal interest, that they owe to their employees for past quarters (1 July 1992 to 31 March 2018).
- Tax deductions for payments of the Superannuation Guarantee Charge
- No administrative penalty of $20 per employee
- No Part 7 penalties (which could otherwise be 200% of the SG Charge owing).
You can find more details on the ATO’s website.
Important: Employers participating in the amnesty need to apply online by 7 September 2020.
Paying superannuation is a key part of being an employer. With STP and the requirement to pay via a super clearing house, it is now much easier for the ATO to detect non-payment of super, so non-complying employers should wisely consider their options, and apply to the ATO to take advantage of the amnesty.
Mukiwa will be reaching out to individual clients that we believe may want to take advantage of this amnesty offer – however we would encourage you to also review where you are at with regards to super payments for your business, and to contact us immediately if you wish to discuss your options.
EOFY – Time for Tax Planning
With the end of financial year approaching quickly, NOW is the time to discuss with us the strategies you can implement before 30 June 2020 to reduce your tax and grow your wealth.
For 2020, key priorities are likely to include:
- Maximising superannuation contributions without exceeding the relevant caps
- Instant asset write-offs for small business
- Bringing forward deductible expenses
- Deferring taxable income
- Managing capital gains
- Using a Family Trust or a “bucket company” to cap your tax at 27.5%
Imagine what you could do with your tax saved!
- Reduce your home loan
- Top up your Super
- Have a holiday (in Australian of course)
- Deposit for an investment property
- Pay for your children’s education
- Upgrade your Car
Contact us today or book in your TaxPlan meeting with us! The sooner we get started, the sooner we can discuss your options, thereby ensuring you have enough time to implement the recommended strategies before 30 June 2020.
For more information, check out our tax minimisation planning guides below:
We look forward to hearing from you soon!
Claiming Expenses When Working From Home During COVID-19
Employees working from home are ordinarily able to claim deductions for expenses relating to work. For people working from home because of COVID-19, the ATO introduced a temporary simplified shortcut method of tracking these expenses outlined in brief below –
You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:
- working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- incurring additional deductible running expenses as a result of working from home.
You do not have to have a separate or dedicated area of your home set aside for working, such as a private study and covers all deductible running expenses.
The ATO has full details on this arrangement, including details on what you can and can’t claim if using the traditional expense claim method. It’s always good practice to keep good records.
Is it Time to Look at Your Business Model?
The business landscape may never go back to “normal” again, which is why it’s so important to take the time now to think seriously about your business. This pandemic may have shown you some ways you can pivot your business model to adapt to economic turmoil. Exploring new ways to earn money, such as additional revenue streams, can provide your business with financial stability, reduce risk and help you be even more successful.
Here are some questions to ask:
- Is my current business model viable following the pandemic?
- If not, are there ways to adjust my business model?
- Can my expertise be used to create additional revenue streams?
- What are current market trends that could affect how I run my business?
- What are my competitors doing to adapt?
Look to businesses similar to yours to see how they’re changing, and how successful their adjustments are.
We are more than happy to chat with you to help you “future-proof” your business. Please get in touch.
Here to help
Finally, as always, we’re committed to helping you through the next few months (and beyond!). If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!
From everyone here at Mukiwa – have a great weekend and we’ll be back next week.